Last checked at 17 Apr 2014 07:00
Gemfields plc
("Gemfields" or the "Company" or the "Group")
US$15 million Unsecured Working Capital Facility
17 April 2014
Gemfields plc (AIM: GEM) is pleased to announce that it has agreed a US$15 million unsecured, 12 month working capital facility (the "Facility") with Pallinghurst Resources Limited ("Pallinghurst").
Following evaluation of a number of proposals received by the Company, the board believes that the Facility represents the best alternative for the Company at this point in time in terms of overall cost and flexibility. The Facility is available in two separate tranches. The first tranche of US$10 million is available to be drawn between 17 April 2014 and 30 November 2014, and the second tranche of US$5 million is available to be drawn between 15 July 2014 and 30 November 2014. Both tranches are repayable, together with accrued interest, on 30 April 2015. There are no penalties for early repayment. The Facility has an interest rate of 3 month USD LIBOR plus 4.5 per cent per annum, an arrangement fee of 2.0 per cent, no commitment fee and is unsecured.
The proceeds of the Facility will be utilised by the Company as additional working capital and for general corporate purposes, helping to smooth the Company's centrally available cash flow given the intermittent nature of revenues from its gemstone auctions and the ongoing development of its ruby, rough gemstone trading and Fabergé businesses.
As at 31 December 2013, the Company had cash in hand of US$14.8 million. An auction of predominantly higher quality emeralds held in February 2014 achieved record revenues of US$36.5 million.
Gemfields presently has two further auctions scheduled for the current financial year, which ends on 30 June 2014. The first is an auction of traded rough emeralds, sourced from the open market, in Jaipur, India in April. The second is the inaugural auction of rough rubies from the Montepuez ruby deposit in Mozambique, which is scheduled for June.
Ian Harebottle, CEO of Gemfields, commented:
"We are pleased to have agreed this financing facility with our key shareholder, Pallinghurst. We have been interested in securing a working capital facility for some time now and, having considered a number of offers from various banks, we have now secured what we believe to be the most appropriate funding option for the Company. The facility also demonstrates Pallinghurst's continued support for Gemfields and its vision for the coloured gemstone sector."
We look forward to the inaugural auction - in June of this year - of rough rubies from the Montepuez ruby deposit, the development of which has been funded entirely by Gemfields from internal resources. In addition, we will be hosting an auction of traded rough emeralds, sourced by Gemfields from the open market in Jaipur, India in April.
It remains a very exciting stage in Gemfields' development. While we have two further auctions scheduled for this financial year and prevailing market indicators remain robust, we have already beaten Gemfields' best ever revenue year given that year-to-date auction revenues stand at USD 92.9 million, with total sales from rough emerald and beryl having reached USD 96.4 million."
Enquiries:
Gemfields dev.shetty@gemfields.co.uk
Dev Shetty, COO +44 (0)20 7518 3402
Canaccord Genuity Limited
Nominated Adviser and Joint Broker
Neil Elliot/Tarica Mpinga +44 (0)20 7523 8000
JP Morgan Cazenove
Joint Broker
Jamie Riddell +44 (0)20 7742 4000
Tavistock Communications
Jos Simson/Emily Fenton/Nuala Gallagher +44 (0)20 7920 3150
Notes to Editors:
Gemfields plc is the leading coloured gemstone miner listed on the AIM market of the London Stock Exchange (ticker: GEM). The Company's principal asset is the 75% owned Kagem emerald mine in Zambia, the world's single largest emerald mine. In addition to the Kagem emerald mine, Gemfields has a 50% interest in the Kariba amethyst mine in Zambia.
In July 2009, Gemfields commenced a formal auction programme for Zambian emeralds mined at Kagem. To date, the Company has held 15 auctions of emerald and beryl produced from Kagem which have generated revenues totalling US$260 million. The Company has also held a traded emerald auction (not obtained directly from the Company's own mining operations) which generated revenue of US$8.5 million.
The Company also owns a 75% stake in the highly prospective Montepuez ruby deposit in Mozambique and licences in Madagascar including ruby, emerald and sapphire deposits.
Gemfields acquired the Fabergé brand in January 2013 with a view to creating a globally recognised coloured gemstone champion. Fabergé provides Gemfields with direct control over a high-end luxury goods platform and a global brand with exceptional heritage.